As the new financial year approaches us, below are some additional tax planning strategies you may want to or are currently discussing with your accountant to see if it s the right fit for you and your business operations.
Accounting for GST on a cash basis
This type of reporting means that you collect and or pay GST in the period you actually receive payments, not when you issue your invoice.
GST cash accounting is also good for improving your cash flow.
Small business restructure rollover
This can be useful in situations where you may be looking to change from a family partnership to a family trust. If you’re a small business entity (SBE), you can transfer an active asset of your business (for example, goodwill) to another SBE that is part of a genuine business restructure; being that there is no change in the ownership of the assets. As a result, capital gains liability will not arise.
Please note that state transfer tax might still apply.
Temporary full expensing
You could take advantage of the government’s temporary full expensing stimulus measure which allows eligible businesses to:
Deduct the business portion of the cost of eligible new depreciating assets that are first held and first used or installed ready for use for a taxable purpose, between 7.30pm (AEDT) on 6 October 2020 until 30 June 2022
Deduct the business portion of eligible second-hand depreciating assets.
Apply temporary full expensing to the business portion of the cost of improvements made to eligible depreciating assets. This applies even if those assets were acquired before 7.30pm (AEDT) on 6 October 2020.
If you do not claim a deduction for an asset under temporary full expensing, you may be eligible to claim a deduction under the instant asset write-off or backing business investment – accelerated depreciation. More details on the economic stimulus measures can be found on the ATO’s website.
As always, if you have any questions, we can be reached here.
